Freelance Coder => Software Firm

Hi,

I've been a freelance web developer for almost five years now. I do PHP, MySQL and ActionScript. I love it and I make good money.

Because most of my clients are middlemen, I earn far less than I would be if I were interfacing with the "real" client. Instead of making $x/hr I figure I'd be making $2x-$4x/hr.

My questions are about getting "real" clients as opposed to middlemen clients and business related tasks:

1. I have a very easy time getting middlemen clients off of craigslist, but most of the people hiring on craig's are indeed middlemen. When I get my business license, what are some effective ways to get "real" clients?

2. What are some of the more time consuming tasks I'd be faced with as a business owner as opposed to a freelancer? taxes? hiring designers?

Thanks

bump.

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I dont know if I would recommend craigslist for finding jobs if you want to make good money... Craigslist is filled with a bunch of cheapskates..

I would suggest trying actual freelance job sites, such as guru.com ... There are many others, but guru.com is the only one i've been using for a few years, so not familiar with the others. Try a google search.


What are you looking into getting a business license for? The way it sounds, you do a lot of freelance work, which you don't need a business license for.


As for what tasks you'd be faced with.. depends on what your business will be doing. If you're just talking about programming, then there's probably no real need for it until you take on enough clients. As a freelancer, you're considered an independent contractor. When someone contracts you, they'll send you a 1099 at the end of the year so you can report your taxes... but again, you don't need a business license to receive a 1099 for freelance work.

Taxes: Yes, as a business owner you would be responsible for taxes. It depends on how you want to run the business which will determine how you handle taxes. Are you going to resell anything?.. Then you need a resellers license and are responsible for sales tax. If you will be "hiring" employees, then you need to have the employees fill out w-2's for their taxes. Instead of hiring, you can contract people which will eliminate you having employees.

Hiring Designers: May be easier to contract designers (freelancers) and pay them per project, rather than by hour (or salary). When you become established is probably when you would want to look into a license.

Also if you'd be working from home, along with a business license, you'd need a home occupational permit. Then, depending on your state, you may not be allowed to have any employees. In which case, you would have to obtain independent contractors.

You need some sort of business plan before starting a business.

This should at least give you some insight... If you still want to get a business license and need more info, let me know and I can help you out, but first come up with a business plan...

The main reason I want to become a "business", and not remain a freelancer, is so that I can drastically increase my rate due to my not having to go through a middleman.

Almost all of the time right now, the "real client" is paying the middle man I'm working for $x/hr and then the middle man is giving me $1/3x - $1/2x. I feel I'm doing most of the work but I'm only getting paid at most half of the total project budget.

The only difference I can see between I, the freelancer, and my middle man client is the fact that he has a business license. This business enables him to get bigger contracts, make more money and make money when people working for him work.

So my business plan is to get a business license which will allow me to take on large projects and make 2x-3x times more money.

Having a business license won't guarantee you getting the bigger projects, any more than not having one will.

On craigslist, which you referred to in your original post, I can understand you contacting a middleman. However, on actual sites made for freelance work, such as guru.com, it's not always a middleman... I run a business of my own, and quite often have used their services to find a reliable programmer. Whether you get big contracts or not is mainly dependent on what you know as to whether you have a license or not.

Even if you were to get a business license, you still wouldn't get those bigger contracts initially until you're established. I know a lot of freelancers who make good money because of their experience rather than a license.

You said the main reason you want a license is so you can increase your rate... If, for example, you charge $100/hour for programming, you better have an awesome portfolio to prove you're worth that. Although, I personally wouldn't pay $100/hour for a freelancer (with or without a license).

Don't get me wrong.. if you want to get a business license, go for it... but based on your reasoning for wanting it, I don't see a need.

Like I said, check out guru.com ... take a look at the bids, how much people make, etc.... That'll help you get a better idea...

i disagree. i've worked for companies/small businesses that get big contracts form toshiba and intel. i really don't see toshiba/intel contracting to a freelancer with no real company/legit business.

i think for non-tech people/big companies - they are a lot more likely to contract their fat projects out to small established businesses rather than to established freelancers with no real business under them.

one more thing, and not to start an argument, but craigslist.com is awesome for finding work compared to guru.com. i'm subscribed to the telecommute software, internet engineer and web design feeds for about 10 different cities. i see about 10 different jobs(50+ total) that i'd want to apply to each day. it rocks.

and one more thing. from your statement about how you can find reliable programmers off guru - this implies that you are a middleman and hire freelance programmers to complete your big contracts. so how did you make the jump from only being hired to hiring and being hired??